The Influence of Ownership Structure And Board Independence On The Cost Of Debt In BRIC Countries
The purpose of the study is to identify the specific characteristics of HRM practices aimed at ambidextrous learning in innovation-active companies of the BRIC countries. The study for the first time compares the ambidextrous learning practices and their trends for convergence in BRICs. The methodology involves descriptive analysis of HRM practices in 200 innovation active companies of BRICs. Results of the study indicate that there are considerable convergence trends within innovation-active companies of BRIC. All countries in general are oriented on knowledge exploitation with their use of specific HRM practices. There are however significant differences within BRIC countries with regard to knowledge exploration.
Key features of national models of corporate governance in Brazil, Russia, India and China are considered. The scheme of the comparative analysis of the given models is offered.
Capital Structure policy still puzzles researchers in developed and emerging markets. We contribute to the literature by examining capital structure policy of large companies in Central Europe and BRIC countries.
Our sample consists of 372 firms from 14 Central and Eastern European and BRIC countries for the period 2002-2009. We conduct separate analysis for both pre-crisis and post-credit crunch periods to emphasize the differences occurred in debt-to-equity choice policy in emerging policy.
Our research rests upon the dynamic trade-off model. According to the concept each company has its own target financial leverage to which it is trying to adjust is actual debt-to-equity ratio with a specific adjustment speed. This rate of adjustment depends on firm-specific, institutional and macroeconomic factors. Moreover the dynamics of a firm’s leverage could depend upon financial deficit of the firm and the cost of available financial sources. The former issue addresses the situation when the choice of financing mix should be made under the existence of information asymmetry, unclear ownership structure and positive transaction costs which could lead to the financing sources hierarchy formation. The latter topic relates to the concept stating that the management would try to take any opportunity of favorable market conditions to reduce the costs of financing.
Our model is designed to test the following hypotheses:
Hypothesis 1. Firms operating in BRIC and Eastern Europe have target financial leverages and positive speed of adjustment. The major determinants of target ratio in these countries are the traditional determinants derived for the developed markets (size, assets profitability, growth opportunities, tangibility of assets).
Hypothesis 2. Existence of internal financial deficit ceases the significance of target financial leverage by decreasing the speed of adjustment.
Hypothesis 3. Market estimates of company’s value and lending rates influence the dynamics of capital structure and lead to the decrease of the target adjustment role (by decreasing the speed of adjustment)
Hypothesis 4. Credit market development and liquidity problems within the credit crunch period cease the role of target adjustment by decreasing the speed of adjustment.
Hypothesis 5. The speed of adjustment in BRIC and Eastern European companies positively depends on the following macroeconomic factors: inflation rate, the growth rate of the economy, the degree of financial market development.
The results of our research show that the speed of adjustment of capital structure to the target level in BRIC and Central and Eastern European countries has reached the level of that of the developed countries. Further, this speed is time-varying, has a cross-firm variation and depends on macroeconomic factors, internal financing deficit and, less significantly, cost of financing.
The proposed decomposition of financial deficit revealed that the major role plays two elements: profit (through profitability) and capital expenditures. Operating cash flow significant grows within the credit crunch period emphasizing the crucial role of liquidity during the unstable period. Moreover the speed of adjustment is lower for the whole sample if compared to the pre-crisis period results.
Market timing factors are significant for Central and Eastern European companies only, where a negative relationship of leverage and cost of debt was revealed. However the changes of market prices cannot explain the capital structure choice in our sample.
Macroeconomic variables (inflation, GDP per capita growth, financial market development) positively influence the speed of adjustment. Thus firms operating in BRIC and Central and Eastern Europe tend to adjust their capital structures to the target levels within the periods of economic growth, high inflation and in the systems with more developed financial markets.
This article provides empirical analysis of the macroeconomic effects of state presence in the financial sector. We develop a set of criteria and execute statistical estimates of the phenomenon based on BRIC country-level data. We assume that at macro-level negative effects of state presence are not indisputable but considerably depend on the country's stage of economic development. According to our estimates government control over banking industry might stimulate financial intermediation only if economic development is low. In terms of other economic development indicators we conclude that for low-income countries state presence might impede investment activity and productivity growth but as the economy develops these effects flicker out or even reverse.
The Global Future of Higher Education and the Academic Profession focuses on the all-important emerging BRIC (Brazil, Russia, India, and China) nations by analyzing the academic profession and particularly salaries and contracts. The professoriate is key to the success of any academic system, and this is the first book to carefully analyze academic systems and the academic profession.
The academic profession must be adequately paid, and appointments to academic jobs must be based on merit and provide an effective career path for the 'best and brightest' to be attracted to the profession. The BRICs show a variety of approaches to academic careers—and none provide globally competitive salaries. China and Russia, in particular, pay academics poorly. Using purchasing power parity, this book is able to accurately compare the actual purchasing power of the academic profession. The book also analyzes how professors are appointed and promoted.
While the BRICs may be emerging global economic powers, their academic systems still face significant challenges.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.